IBM Retail As Theatre


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This is a summary of my Retail As Theatre Customer Experience event - written in the style of a magazine article. It addresses customer loyalty and barriers to creating a great customer experience

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IBM Retail As Theatre

  1. 1. IBM Theatre of Retail: Creating a Unique Customer Experience Courtesy of IBM Canada Retail, customers took in a show at The Second City Theatre in Toronto.
  2. 2. IBM Theatre of Retail: Creating a Unique Customer Experience The lights dimmed. A hush topics – punctuating the chat fest with surveys in real-time using a humorous asides. The audience of TurningPoint interactive device. fell over the audience. From retail movers and shakers also had And like any good theatrical stage left, an affable host a role to play: they listened, laughed, production, there were some bounded to centre stage asked questions, and reacted to surprises along the way. as the bass line swelled. Applause erupted. A taping of Regis and Kelly? A night at the Royal Alex? Not exactly. Courtesy of IBM Canada Retail, customers took in a show at The Second City Theatre in Toronto. The name on the marquee? IBM Theatre of Retail: Creating a Unique Customer Experience. Throughout the morning, it was clear that IBM not only under- stands the customer experience, they are capable of creating one. So what exactly does the Theatre of Retail look like? Well, it’s like dinner theatre – for breakfast. Lee Smart, like chat-show hosts everywhere, perched on a stool to guide four retail expert panelists through a wide range of The setting: The morning line-up: SYNOPSIS: I Customers heard respected indus- Second City Theatre, Toronto The participants: I Chris Johnston, Hosted by IBM Canada Retail try figures share their ideas on inno- Marketing. vative business models and VP of Apparel, Wal-Mart Canada I Susan Confort, best-in-class customer experience The backdrop: thought leadership I Participants enjoyed demos of state The retail industry is about the Worldwide Director of Marketing, experience it provides to its con- IBM Retail I Liz Evans, of the art technology specifically fo- sumers – fashion and colour, sounds cused on the customer experience, and scents, satisfied clientele. Theatre. Director, Ted Rogers School of with kiosks, personal shopping de- Today’s retailers are on the lookout for Retailing, Ryerson University vices, store integration software and I Hung LeHong, ways to create a customer experience business process re-engineering that is distinct to their brand. That’s Vice President of Research, The main event: why the 2008 Retail showcase does Gartner Retail Industry Team not just talk about the customer I The audience: An enthusiastic mix The breakfast theatre session was experience, it creates one. divided into three broad topics: of IT management, sales & market- customer loyalty, improving the cus- ing, operations management and tomer experience, and the barriers C-level executives to a compelling customer experience.
  3. 3. Scene #1: Customer Loyalty Host Lee Smart started by posing this question to the audience: Most of my customers are: I antagonistic I indifferent I engaged I fans Within seconds, interactive TurningPoint devices across the theatre were busily engaged. Minutes later, the results were in and a chart appeared onscreen. And the survey showed: According to the survey, 48 percent of customers are either indifferent or antagonistic, a startling finding that got the panel talking. UNDERSTANDING dissatisfaction in their attitude, while “We need to tailor it to them and ANTAGONISM Chris noted that the work and effort personalize it. poured into converting antagonists How? According to Hung, customer “We’re doing something wrong will filter across the rest of the service is about the sales people on when almost 20 percent of customers consumer groups, even the fans. the floor. Your brand is represented are not happy,” said Wal-Mart’s by your people. Chris Johnston. CREATING FANS For grocers, product availability, The panel agreed that antagonists Pointing out that the survey showed convenience and freshness drives are the most dangerous consumers. that 20 percent of customers are loyalty, according to an IBM survey People share bad news much more fans, the panel noted that brand six month ago. The economy also quickly than good news. However, is paramount. Look at the loyalty affects advocacy behaviour. In dire the factors that create antagonism Apple generates. On the other hand, times, loyalty can change very quickly. or support might be outside of the a store focused on replenishment Price can influence customers to control of retailers. In today’s social (convenience store) or a transaction switch to discount stores. media environment, opinions spread (Money Mart) has limited potential in a viral fashion. Although loyalty fac- In an abrupt shift to the theatre of the to inspire fan behaviour. tors can be out of the retailer’s control, absurd, discussion was halted by an Although more fans are derived retailers need to understand how to unexpected visit from self-proclaimed from brand than customer service, influence the ‘buzz’ around their store. ‘retail guru’ Dr. Dash Walmsley, author the key for winning fans is to create of Mad Dash: 20 Tips to Making a Run So the question for retailers is: expectations and then consistently for Success. To the strains of “ANY How can we influence perceptions meet and exceed them. WAY YOU WANT IT,” Dr. Walmsley to create brand advocates? According “Caring and empathy is part of our bounded to the stage. Calling to Gartner’s Hung LeHong, it takes challenge,” Chris said. “Take the time himself an ‘experi-expert’ (someone more than just putting a corporate to understand, so that the customer who specializes in the customer profile on Facebook. The company’s feels you relate to them, understand experience), Dash proclaimed, “I am Web presence should also involve their needs and their values – and no egghead. I cut my chops in the providing access to helpful tools then react accordingly.” stores and on the floors, observing, and interactive features. learning, eating, sleeping and dream- “In order to meet customer expecta- Ryerson’s Liz Evans pointed out that ing the customer experience.” Laugh- tions, you have to know what they indifferent customers are dangerous ter – but not much learning – ensued. want,” IBM’s Susan Confort noted. too, because there is an inherent
  4. 4. Scene #2: Improving the Customer Experience Lee Smart asked the audience to answer the following question using their TurningPoint devices: As a consumer, the most important driver of the customer experience is: I Well-trained/attentive staff I Merchandise (breadth of selection/in stock) I Store layout/appearance I Loyalty program/tailored offers I Multi-channel presence (shop the way you want) Within minutes, a bar chart appeared on the onstage screen. And the survey showed: THE IMPORTANCE OF MULTI-CHANNEL Remember, a fair price and good loca- MERCHANDISE tion precedes the customer experi- PRESENCE AND LOYALTY ence. But price is not the ultimate PROGRAMS According to a decisive majority of driver of fan behaviour. respondents, merchandise selection Liz was surprised by the low score What is required is creating the and availability is the most important for multi-channel presence. “Often, perception of overall value. That’s part of the customer experience. the Internet shopping component where consumers become brand This stirred some discussion precedes the in-store experience. advocates. If you achieve that, you’re amongst the panelists. Customers want to know if items are satisfying customers across many in stock before getting to the store.” Chris wasn’t surprised by the results. other planes: merchandise, product “At the end of the day, if they don’t Susan agreed. “Tech-savvy young quality, speed of service, breadth of get merchandise right, nothing else people expect to be able to make selection, and price. matters. With the right insights, purchases anytime, anywhere. And Due to ‘contractual obligations’ you’ll create the right products.” they won’t tolerate anything less.” Lee Smart once again welcomed Hung agreed merchandise is crucial. And the merits of loyalty programs? Dr. Walmsley back to the stage. “Gartner surveys show that in-stock The panelists agreed that successful Bounding forward, Dash yelled, and easy to find merchandise are loyalty programs are about cash dis- “Bring on the retail noise!” then the most important considerations counts to customers, convenience, claimed that turning customers into for customers, although that varies and quickly receiving benefits. brand advocates was his ‘wheel- by retail segment. The product is the house.’ The trick? “Give them candy DELIVERING OVERALL bottom line. That label is in your closet, of course! People love candy. VALUE and you’re either happy with that brand You get more flies with honey than or not, and it’s a reminder of the retail “Again, it’s all about customer with vinegar. It’s like drugs, but experience.” expectations,” Hung noted. “At a cheap and legal.” Susan noted that the store experience gourmet grocery store, customers can be fun, but merchandise is still expect a certain experience. If you vital. She said that IBM research shows don’t deliver, you’ll disappoint. In the that there certainly are segments, like discount store, speed at the checkout grocery, where merchandise is most and breadth of merchandise are key important. Fair price is also an impor- components of the value.” tant driver for those segments.
  5. 5. Scene #3: Barriers and Enablers of Customer Experience The final question posed to the audience was: As a retailer, the greatest barrier to creating a compelling customer experience is: I Employee turnover I Outdated technology I Not understanding customer expectations I Other business priorities I Lack of a customer-centric focus Once again, the theatre audience entered their answers into the TurningPoint devices. And the results showed: CUSTOMER to those needs. Ideally, a local store As the panelists were applauded EXPECTATIONS manager should have input on local for their contribution, Dash bounded preferences. Then, if it works well back onstage to the pounding Not understanding customer expecta- locally, distribute that idea across rhythms of “The Final Countdown.” tions eclipsed every other barrier ex- all the stores.” He recommended that retailers cept the need for a customer-centric build mazes and puzzles in the focus. How did that play with the pan- THE ROLE OF store, suggesting that consumers elists? TECHNOLOGY will feel enabled when they “First impression?” Chris asked. “If 46 overcome the barriers. “They will Technology will continue to increase percent of retailers don’t understand brag to their friends, and you will in importance. According to Susan, customer expectations, then there are get brand advocates!” for younger consumers who have real problems.” never lived without the Internet or cell He concluded in noble fashion. According to Liz, the breakdown phones, “technology is always there, “We are our own greatest barrier, occurs because retailers are not and it always works.” Hung agreed and we are our greatest enablers. always clear on who their target that young people look for simplicity Lead through innovation, hypnosis, customers are. “Trying to be all things in use, as exemplified by the iPod. candies and mazes. You are the to all people can lead to too much Therefore, technology needs to be retailers, you are the IT people, competition with other retailers and focused on providing simplicity and and you have the power and confusion about customer expecta- functionality while hiding complexity. knowledge. And with great power tions. If you’re consumer-centric, you comes great responsibility.” Chris pointed out that technology have a very clearly targeted core also supports retailers in executing customer, so understanding their their strategy. expectations is a lot easier.” “If you’re customer-centric, you According to Hung, the local compo- understand their expectations even nent is a key factor in understanding at the local level, such as knowing and meeting customer expectations. which sizes to carry,” Hung said. Large, centralized retailers can lose “You know your market and who the local capability to meet sizing and the core customer is.” pricing needs. “Segment your cus- And knowing the customer is what tomer base, and then operationalize it customer satisfaction is all about. by treating stores differently according
  6. 6. Scene #4: TotalStore Showcase At the end of the final segment, attendees were asked to submit questions for the panel to address during the Q&A session. Demos were staffed by the IBM This was followed by an interactive TotalStore field team and included: TotalStore Showcase and networking I 3D Digital Media/ Second Life session. The showcase provided a view of the state-of-the-art technology Plasma Display I Kiosk / Expert Advisor that enables retailers to differentiate themselves as leaders in the customer I Store Dashboards experience – with kiosks, personal I Multi-Channel Retail (WebSphere) shopping devices, store integration I Everywhere Interactive Display software and business process I Personal Shopping Assistant reengineering. Mobile POS Scene #5: Question & Answer Session Q: Why have so many well-known Q: What ways are there to get to know brand-name retailers disappeared your customers when you don’t or lost their focus? have the budget to do that? A: They become diluted, which is A: Market basket analysis, for example dangerous. In economic boom in a grocery store, lets you know times, it is possible to have what your customers are buying growth without clarity on strategy. so you can stock the shelves ac- When times are good, how do cordingly. Also, have your staff talk you know when to change or to the customers on the floor. Build take a risk? Rather than reacting, a culture of caring and listening, EPILOGUE: CONCLUSION it’s important to be anticipatory. and then respond to concerns. IBM can help you implement innovative strategies to differentiate your brand, reduce costs and work Q: If we work to achieve true Q: How can retailers move into the more efficiently by collaborating customer-centric focus, would next generation of analytics? How with suppliers and partners. we still need a traditional loyalty do we get this information into the program? hands of the right decision makers? For more information, contact your IBM representative or visit: A: Loyalty rewards the customer for A: Customer information needs to be the openness of their dialogue endemic to operations. Get it out of with you and keeps you focused marketing and into store operations on what matters. Loyalty programs and merchandising. can generate important data on your customer.